Euro MP backs broadcast push

In a further blow to the already beleaguered UK cable industry, an influential Euro MP said yesterday he was seeking amendments to the European Commission's cable TV directive in order to open the broadcasting sector to competition from telephone companies.

"If cable operators want to compete in other fields, they should accept that other players have a right to offer cable TV services," Fernand Herman, a member of the European Parliament's powerful Economic and Monetary Affairs Committee, said.

Mr Herman outlined his proposed amendments at a meeting last week attended by European Commission officials. He is to seek the support of committee members before going before the parliament in a few months' time.

The news was welcomed by British Telecom, headed by Sir Iain Vallance, which has complained that UK regulations keeping it from offering cable broadcasting services before 2001 were unfair.

"We believe that liberalisation should extend to all infrastructure, and there is no reason why it shouldn't be bi-directional," Lawrence Stone, director of European affairs at BT, said.

But UK cable operators expressed anger at the move. Richard Woollam, director general of the Cable Communications Association, said adopting the amendments "would be a disaster."

"If we are serious about encouraging alternative infastructures financed by the private sector, cable operators need a period of grace."

That position is broadly supported by the British government and by much of the Commission.

The cable directive was issued under Article 90, which normally allows the Commission to open markets without reference to the parliament or the Council of Ministers, provided a basic framework has already been agreed.

But under the Commission president Jacques Santer's "code of conduct" negotiated last year, Mr Herman believes the Commission would be under "a moral obligation" to accept the amendments if a majority of MEPs voted in favour.

The Commission argues that the directive is intended to further the deregulation of nonvoice telephony in European Union countries, which member states have already approved. It would allow cable companies entry into data transmission and private telephone networks and interactive services such as home banking from 1996.

A more extensive liberalisation is promised for 1998, under which even voice telephony would be open to cable operators. The draft 1998 legislation must go to the Council of Ministers and to the parliament for their input.

The UK has already liberalised both data and voice telephony, allowing cable companies to use their networks to provide business and residential services.

In order to give cable a chance to develop, BT is prevented from offering cable broadcasting over its network. It can, however, offer a range of non-broadcasting services such as video-on-demand.

"BT has no real interest in broadcasting entertainment," Mr Woollam said. "They are engaged on a destabilisation plan to unsettle the market for cable in the UK."

Several recent new issues of UK cable shares have been met with growing investor resistance. Three recently listed shares are now trading below their issue price.

Separately, Karel van Miert, Competition Commissioner, said that the 1998 draft legislation was now being produced, and copies would be distributed to the Council and the European Parliament in coming weeks. Commission bureaucrats are working on measures to ensure open competition